As I think I’ve mentioned before, New Zealand has one of the most fascinating higher education policy scenes anywhere in the world. Hardly a year goes by where they aren’t making huge changes to research policy, tuition fees, student aid, or international student rules. Must be exhausting to live there.
In any event, all this policy hyperactivity means this podcast often returns to New Zealand to see exactly what’s going on. And with the election coming up next month, we thought it would be a great time to drop in on our friend Roger Smyth. He’s a tertiary education consultant and formerly top official at the New Zealand Ministry of Higher Education. He’s a fantastic guide through the sometimes tangled trails of New Zealand policy.
In this episode, we talk about the national government’s recent record in higher education, and in particular, its policies on research, tuition fees, and international students. But we also talk about how different political parties are approaching higher education in the run-up to the November 7 election, and how minor party preferences might affect higher education come the inevitable post-election coalition negotiations.
It’s a great episode about a great country, so without further ado, let’s turn things over to Roger.
The World of Higher Education Podcast
Episode 5.6 | New Zealand’s Higher Education Crossroads
Transcript
Alex Usher (AU): Roger, welcome back to the program.
Roger Smyth(RS): Thank you.
AU: When we last spoke – that was about 18 months ago, I think May of 2025 — and back then we were just awaiting the result of the university’s advisory group, and that was sort of a… not a royal commission, but it’s still a sort of a government inquiry into how the system should be organized.
What was the outcome of that? Back then you predicted incremental rather than radical change. Were you right?
RS: I think I got it pretty much right. The review committee’s proposals for changes in machinery of government, a new regulator, that sort of thing, they were all rejected by the government.
But there were a couple of things of significance that came out of it, and the first was a decision to change the research funding model in universities. A shift away from the kind of UK research assessment exercise kind of thing that relied a lot on peer review, and it was supplemented by a couple of indicators. That was unpopular and cumbersome and costly, and it was very disruptive to the universities. But it did lead to positive cultural change in the system.
So, following the report, the government did some work on an alternative approach, which was to abandon the peer review process and to base allocation on a whole set of funding metrics, bibliometric measures, and some complimentary ones like research degree completions, external research income, that sort of thing. That’s going through a design process.
And the second thing that happened of significance was the simplification of quality assurance in the universities, and this sees a move away from a collegial accreditation to audited self-accreditation. But the framework for that is still under development
AU: So I’m curious, when universities were told, “Hey, we’re not gonna do complicated assessment, we’re gonna do metrics-based assessment,” were they any happier?
RS: I think there was a general view that this was a move in the right direction. Analysis showed that the metrics predict the peer assessment very well, but they do create different incentives so that the detailed design, which is still being worked on, is what’s going to really matter.
AU: Okay. Interesting. Well, we’ll keep an eye on that. So meanwhile, I mean, I’m fascinated with this idea that the government could call an inquiry and then reject most of what the inquiry comes back with – that was pretty interesting. But one of the key things that it did was it rejected the idea of an independent sector regulator on the Australian model, I guess, and instead decided to implement what it called a university strategy group.
How does this group work? Who’s in it? What powers does it have?
RS: Okay. Now you could say that this is the third thing that came out of the review. But this strategy group was designed to improve cross-sector coordination. It was gonna be chaired by the minister, and it would be running for a trial period of 18 months. But not too long after the inaugural meeting, the minister at the time announced he was gonna step down from parliament at the next election, he would leave cabinet, and in the resulting changes, the government reunited all the parts of the tertiary education portfolio, vocational as well as higher education.
Now the strategy group appears not to have been meeting since, and I’m not aware if the external members have even been appointed. So, I would see this as quietly disappearing over time, unlike the… there was a corresponding strategy oversight group set up in the research, science and technology portfolio that’s been very active.
AU: And so, they rejected a regulator in favor of a strategy group, and the strategy group doesn’t exist, so all the power remains with the minister?
RS: Yes, the power remains with the minister, advised by government agencies whose roles have not been in any way clipped.
AU: Okay that’s that progress. The government seems very keen on making universities engines of economic development. Like, I’ve seen this a lot in their, rhetoric about, if not research assessment, then research concentration, I guess. I mean, what changes have been made with respect to research in this respect?
So, two years ago there was the big thing about getting rid of the Marsden Fund or getting rid of social sciences and humanities from the Marsden Fund. What’s happened since then?
RS: Okay, the reforms in science – research science and technology stand in contrast to what’s happened in tertiary education. This has been reorganized and made much more centralized now; with a single research funding body, more explicitly strategic, organized around four big themes to get greater alignment with the economic priorities – things like primary industries, technology, environmental sustainability, and health.
The number of public research organizations has been reduced through mergers — a new technology one’s established to try to capture some of the benefits of commercial opportunities in advanced tech like AI and that sort of thing. And if you look at how the allocation of research funding plays out and compare us with other comparable economies, we’ve always had quite a centralized system of distributing funding, and these changes will just further increase that centralization.
In effect, the government is banking on getting greater value from more central direction in its decision-making, which is, I would say, questionable. The low level of funding for areas like social sciences will reduce further, and I think it goes without saying that in these constrained times, the government doesn’t want to spend anything more on anything, so that the long-term aspiration that the government had in the middle of the last decade to bring R&D spending up to 2% of GDP, that’s been long forgotten, I think.
AU: Oh, interesting. Okay. I mean, New Zealand has been on the low end of OECD countries in terms of spending. So, I guess there’s a certain appeal to efficiency, I guess that seems normal. We should have a smaller group. It should be more strategic. Has New Zealand had success in the past with trying to focus research efforts that way?
RS: Well, you’re certainly correct that that’s the way the government’s logic is working. Whether or not it works in practice, I think is another matter. My sense is that there is likely to be more work or more success in the traditional areas of bioeconomy and that sort of thing.
Whether or not the Advanced Technology Institute, which is designed to get benefits from artificial intelligence, and quantum computing, and advanced energy, and synthetic biology – whether or not those sorts of areas will actually succeed, it’s questionable. We’ll have to wait and see. But certainly, that’s the direction of travel.
AU: Yeah. Tell me about what’s going on with fees in New Zealand. So, you know, famously — I guess just before COVID – the Labour Party came… Jacinda Ardern came in and you had a first year free fees, which as you pointed out on an earlier episode, didn’t work very well. National comes in and they are changing things for the purpose of changing things, and all of a sudden we have last year, final year free fees, and now we have no free fees, as I understand it. That just after one year they’ve decided to cut that program.
What prompted the government to kill it, and what’s been the public reaction?
RS: Okay. Well, fees-free really lost its credibility. There was general acceptance that it was very regressive. It benefited mainly the richer people. The anticipated behavioral response in terms of extra participation or success rates was absolutely zero.
So, it was thought up by Labour and Opposition as a vote winner. Perhaps it even did help them win the 2017 election. But when the government decided to can it, they said, “Oh, well, it was dead-weight expenditure.” They had better things to do with their money. They spent a little bit more money on vocational education.
Students were aggrieved, they complained, but I think that the general public was pretty much unaffected. Chris Hipkins, the leader of the Labour Party, said – and he was the minister at the time when it was introduced — he said he would not restore it if he was to win the 2026 election, and he wouldn’t do it in that way, is what he said. He wouldn’t do it in that same way now. So, he was really conceding this was a policy that was wrong.
AU: Got it. And I guess my last question here…this is, it’s a big one for Canada. New Zealand seems to have bucked the trend across the Anglosphere of declining international student enrollments. Like, you’ve actually got growing numbers, and in part that’s helping institutions through a bit of a lean period in terms of government transfers.
What’s been the public reaction? Has there been any backlash from the public about this? And, you know, how likely is it that New Zealand is gonna be able to keep on going down this route?
RS: So, I think that there’s general public acceptance that the funding model is such that international students are a critical part of the resourcing of tertiary education. While the universities are well above their previous highs and have completely recovered from the downturn in international enrollments during COVID, the numbers are down in vocational education.
Polytechnics are well off their peak and that reflects changes that were made back in 2017 and ’18 to tighten access and to remove some malpractice in some of the lower level international enrollments. So, that’s not a COVID effect. Across the whole system, internationals are just pretty much where they were.
And one of the effects of that is that the universities in particular have strengthened their finances. They were in a very tight situation following COVID as a result of the loss of international students. I think that the public accepts that, understands the value of that. We haven’t had the sort of public backlash against international enrollments that we’ve seen in Australia, in Canada, and in the UK.
And the government’s aim has been to reduce some of the glitches in the visa granting system, rather than — as in Australia — place huge obstacles in the way of granting visas for international students.
AU: We can only look on with envy. Roger, so New Zealand has an election coming up in a few weeks, early November, and my understanding is it’s pretty tight between National and Labor. What are the main issues? What’s the election about?
RS: Okay, so this is the tightest and oddest election for decades and decades. So, both of the two major parties and their leaders are pretty unpopular, and between them the two major parties are polling at less than 30% each. And their leaders have both got very negative net approval ratings.
So, the four minor parties ACT and New Zealand First on the right; they try to influence the National Party towards more social conservatism in the case of New Zealand First, or more economic liberalism in the case of ACT. And then on the left there are two minor parties; the Greens, which is a very left wing party with an environmental heritage, but actually a broader economic agenda that’s quite left wing. And Te Pāti Māori, which is the indigenous peoples party, which is also very left wing.
Now we have a new party, a fifth minor party called Opportunity. It’s been around for a few years, and it looks like for the first time, in response to the disenchantment with the major parties, it might break the 5% threshold and get into parliament.
They see themselves as green-blue. They’ve got a whole lot of environmental policies but they are also promoting fiscal responsibility. The polls have them somewhere between 5 and 8%, and if that plays out, it will be Opportunity that chooses the next government. Now, the main issues, the cost of living, fiscal management, inequality, housing, health, schooling, that sort of thing, but not tertiary education.
AU: Well, I was gonna ask… I mean, are there differences between the two main parties in terms of higher education? They’ve had differing policies on fees, obviously, in the last little while. So, is this gonna be one of those Tweedledee/Tweedledum elections, or are there substantive differences between the two parties?
RS: So one of the interesting things is that both main parties have decided to focus not on what happens in the tertiary education system, but on the level of graduate debt. So, remembering that New Zealand’s got a government-run, zero interest, income contingent student loan scheme — National’s plan is to reduce the repayment obligation, which is done through the tax system, from 12 cents in the dollar over the threshold to 10 cents in the dollar over the threshold.
That would ease the cost of living pressures perhaps on recent graduates, but it would extend repayment time, so it would be very costly. They are gonna offset that cost by getting much tougher on those who immigrate before a full repayment. Those who go overseas do have to pay interest, and under this proposed policy the government will lift their interest rate, and they will go harder on collecting overseas debt using commercial debt collection companies, and increasing the power to arrest people at the border if they come back with overdue debt repayment. And a range of other things to try to offset the cost of their reduction in repayment rate.
So, Labour has also got a new flagship policy on student loans. So, nine years after they introduced the doomed fees-free policy, they’ve come back in this campaign with a new way of reducing student debt which is — they will write off 10% of graduate student loan balances for all graduates who; one, didn’t get the benefit of fees free, and two, remain in New Zealand for three years post-graduation. And then if the loan balance gets down as low as $2,000, it gets written off altogether.
AU: And that’s closer to what the Australian Labor Party did in the last election, right? That was a write down of debt.
RS: Yeah. That’s right, yeah. So, what they claim to have a costing of it. I’m not sure that the costing is that robust. Both parties’ policies are very expensive. I suspect that they have underestimated the cost because over and above the immediate costs, there is an impact on the fair value of the capital asset, the loan book, which sits on the government’s balance sheet.
That impairment will be substantial and will have to be expensed on the government’s books. So, I’m not sure if either party has properly addressed this. But it’s interesting that you used the term Tweedledum/Tweedledee, they’re both addressing the same issue – graduate debt level.
AU: Yeah, and they’re both willing to spend money to make higher education cheaper, but not to make it better.
RS: Yes.
AU: Okay. What about the smaller parties? Well, I mean, clearly, as you said, it’s quite likely they’re gonna play a role in forming the government. Do any of the smaller parties have any interesting ideas?
Are there any populist parties like, you know, Australia’s One Nation with particular views on immigration and international students?
RS: So, we have our own version of that called New Zealand First. New Zealand First’s been around for 30-odd years.
AU: That’s Winston Peters’ party?
RS: Winston Peters’ party, that’s correct. And they have always had an anti-immigration stance or at least a skepticism about immigration. They have been looking to cash in on the sort of rhetoric played out in Australia by One Nation.
They won’t get to lead the government of course, but they will play hard in the coalition negotiations. They have said that one of their bottom lines in negotiations will be they want a New Zealand First person in the immigration portfolio. And then they’ve come up with a policy that would impose some restrictions on international students, largely borrowed from the Australian Labor Party’s your Labor government’s stances, which essentially restrict the way in which visas operate so that they’re not as tough in eliminating or in really reducing international education. But they will make it – if they get the chance – they would make it harder for students to get visas and they would make it harder to use. Say for student visa holders to exercise work rights and to transfer from one qualification to another.
AU: You said this was one of the strangest elections in the last few decades, but is it gonna be a consequential election for higher education, do you think? Does it matter that much who wins? I mean, we’ve seen this in other Anglophone countries where, you know, in the UK and Australia, you know, a left-wing party takes power and all of a sudden there’s fewer culture war vibes, but there’s no more money, right? Like, it doesn’t necessarily change that much for higher education. What do you think higher education in New Zealand in 2027 looks like?
RS: Very much like higher education in 2026, actually. I don’t see a huge change. I think if the government were to change and the center left block come in, there would be a probably a little bit more emphasis on restoring vocational education, which has suffered from a lot of reforms since 2018/2019.
And I don’t see much change in the higher ed. The only issues I think will be whichever party’s student loan debt policy comes into effect. As you said, I don’t see any moves to change the fundamental settings that exist in the tertiary education system as it stands right now.
AU: Roger, thanks so much for joining us today.
RS: Thank you.
AU: And it just remains for me to thank our excellent producers, Sam Pufek and Noah Arney, and you, our listeners and readers, for joining us. If you have any questions or comments about this week’s episode or suggestions for future episodes, don’t hesitate to get in touch with us at podcast@higheredstrategy.com.
Join us next week when our guest will be Katherine Isaacs. She’s from the University of Pisa. She’s the former Vice Chair of the Bologna Follow-Up Group of European Higher Education Area. And she’ll be joining us to discuss recent changes in Italian higher education, and in particular, the expansion of online universities. Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
